Consumers’ attitudes about their current situation – largely inflation – dragged down July’s numbers more than worries about the future.
BOSTON – The Conference Board Consumer Confidence Index decreased in July, though the drop didn’t match one from the month before. Consumer confidence has now declined for three months in a row.
The Index now stands at 95.7, down 2.7 points from 98.4 in June. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – fell to 141.3 from 147.2 last month. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – ticked down to 65.3 from 65.8.
“Consumer confidence fell for a third consecutive month in July,” said “The decrease was driven primarily by a decline in the Present Situation Index – a sign growth has slowed at the start of the third quarter,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Expectations Index held relatively steady but remained well below a reading of 80, suggesting recession risks persist.”
Franco says concerns about inflation – mainly gas and food prices – continue to weigh on consumers.
“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes and major appliances all pulled back further in July,” Franco says. “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”
Present situation in July
Consumers’ appraisal of current business conditions was less favorable:
- 17.0% of consumers said business conditions were “good,” down from 19.5%
- 24.0% of consumers said business conditions were “bad,” up from 22.8%
Consumers’ assessment of the labor market was less optimistic:
- 50.1% of consumers said jobs were “plentiful,” down from 51.5%
- 12.3% of consumers said jobs were “hard to get,” up from 11.6%
Expectations six months in the future
Attitudes were mixed about short-term business conditions outlook:
- 14.0% of consumers expect business conditions to improve, down from 14.6%
- But 27.2% expect business conditions to worsen, down from 29.7%
Consumers were also mixed about the short-term labor market outlook:
- 15.7% of consumers expect more jobs to be available, down a bit from 15.9%
- But 21.4% anticipate fewer jobs, down from 22.2%
Consumers were more pessimistic about short-term financial prospects:
- 14.7% of consumers expect their incomes to increase, down from 16.1%
- 15.7% expect incomes to decrease, up from 15.3%
The monthly Consumer Confidence Survey is conducted for The Conference Board by Toluna. The cutoff date for the preliminary results was July 21.
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